How much do you need to earn to have a similar or better standard of living in another country? We discuss cost of living, quality of life and issues that impact expats. And offer International cost of living index comparison and expat salary calculators.

Wednesday, February 19, 2014

The days are gone when people remain in one job their entire lives, let alone the same city, people want to move where the work will take them and moving from one country to another is now more common than ever. These expats are also readily taking up positions in places known for being medium to high hardship locations.What exactly is Hardship? This is the relative difference an expatriate and their family are likely to experience and the relative impact on their lifestyle when moving between different locations. Measuring the relative quality of living in each location, and assessing the level of difficulty that will be experienced in adapting to each location.These can include: Economic, Political, Religious, Public Service, Environment/Climate, Personal Safety, Health, Education and Transportation Factors.The latest Xpatulator.com cost of living survey results out for 2014 show that the countries that are the cheapest on the global markets are not actually cheap for expats. With
more and more companies looking at emerging markets, relocation is becoming more prevalent in most multinational firms and more projects are being
set up across harsher environments or not so comfortable socio-political zones.
There is also the appeal of cities such as LA, New York or Switzerland which
will always attract people, no matter how high the cost of living. Salaries and compensation differ between
companies and from one region to another.

If a company wants to retain its
talent and curb attrition rates in these trying times, then it has to ensure ongoing
career opportunities and growth as well as the right employment benefits. It is
the responsibility of the HR department to keep itself updated on changes in
the locations under their purview, offer appropriate salaries and benefits that will make for a
comfortable expat transition.

Some of the key benefits include –

Attractive
salary packages

Medical
and other insurance coverage

Guidance
on family, education and social life

Information
on the socio-political and economic situation of the location

Growth
opportunities within the region and company

The Internet and advances in technology have opened up opportunities
and markets to global competition. Therefore, it has become even more
imperative for companies to attract and retain the best talent in their fields.
In order to do so, they need to offer competitive packages to their employees
who are the face of the company across the globe.

Luanda in Angola is the most expensive expat destination internationally and although it shows a fall in its currency and an apparent low cost of living, in reality rising inflation and the high cost of imported goods have ensured that it is the most expensive expat destination worldwide. Caracas in Venezuela, is the fourth most expensive for expats due mainly to the massive increase in the inflation rate (between 30 and 40%) in 2013 and severe shortages of imported goods.

The cities of Zurich and Geneva are still within the top five
most expensive expat destinations,
this is mainly due to the high living expenses for expats with a strong
and stable currency and lower rentals than last year.

Asian markets are booming and attracting talent however
places such as Tokyo and Singapore still rank high due to their high rental
costs.

Companies have to ensure that they offer good compensation
for these cities and maintain a healthy bottom line at all times. This means,
ideally every zone should work as a profit center for them.and salary packages that are offered should not compromise their financial stability or
their employees’ ability to maintain their standard of living in their new location.

The cost of living variances can be determined by using the
correct mobility calculator -- Salary Purchasing Power Parity, Cost of Living
Index, Cost of Living Allowance or International Assignment Management.

Steven McManus is a Remuneration and Benefits Consultant and founder of http://www.xpatulator.com where employers and employees can calculate how much they need to earn in another location to have a similar spending power.

Calculators include Salary Purchasing Power Parity (recommended if you are an organization planning to relocate an employee to an international location, or an individual with a job offer in another country),

International Assignment Management (recommended for the calculation of the compensation and benefits for a typical expatriate assignment of six months up to five years duration using your choice of home and host location),

Cost of Living Allowance (recommended for calculating a cost of living allowance for short-term assignments and a detailed cost of living comparison basket by basket) and

Cost of Living Index (recommended for the calculation of 3 or more host location cost of living indexes using your choice of home base city).